The Institute for Economic Justice (IEJ) has made a submission to Parliament’s Standing and Select Committees on Finance on the 2026 Revised Fiscal Framework and Revenue Proposals, calling for a fundamental rethink of South Africa’s fiscal strategy.
The submission argues that South Africa’s current approach to fiscal consolidation prioritises debt reduction and spending restraint over employment creation, poverty reduction and economic development. With unemployment at 43.8%, average economic growth of just 0.9% between 2013 and 2025, and declining domestic investment, the IEJ warns that the current strategy is failing to address the country’s deepening social and economic challenges.
The IEJ highlights how fiscal consolidation is producing harmful trade-offs, including the underfunding of public services and infrastructure, cuts to social grants, and an increasing reliance on private-sector-led models of service provision. The submission challenges National Treasury’s claim that R13 billion in social grant cuts reflects reduced fraud, pointing instead to the exclusion of eligible beneficiaries through administrative and verification barriers. It also warns that cuts to social assistance undermine efforts to address gender-based violence and child stunting, rather than complementing them.
The submission further argues that South Africa cannot achieve sustainable debt reduction without stronger economic growth, industrialisation and coordinated macroeconomic policy. Rather than relying primarily on spending cuts to reduce the debt-to-GDP ratio, the IEJ calls for investment in productive industries, infrastructure, renewable energy, food and energy resilience, and decent employment. It also raises concerns that the proposed new fiscal anchor could entrench austerity and restrict the government’s ability to meet its developmental and constitutional obligations.
To address these challenges, the IEJ calls on Parliament to reject the proposed Revised Fiscal Framework and Revenue Proposals and pursue an alternative fiscal strategy. Key recommendations include mobilising additional revenue through fairer taxation of wealth and financial assets, tackling illicit financial flows, strengthening state capacity, protecting funding for essential public services, integrating gender-responsive budgeting, and coordinating fiscal, monetary and industrial policies to support inclusive growth.
The submission argues that fiscal sustainability must be built on an expanding, productive economy that delivers decent jobs, reduces inequality and meets people’s basic needs, rather than on spending restraint alone. It calls for a fiscal framework that places South Africa’s developmental priorities and constitutional obligations at the centre of budget decisions.